Next year in January, the European regulation MiFID II becomes effective. MiFID are the initials of Markets in Financial Instruments Directive. There was already a first version, but the evolution of the market and the interest of the European institutions to protect individual investors promoted this second chapter.

What does it mean? Actually, the regulation improves transparency in the markets and prices, promotes lower costs and strengthens investment protection. For instance, what investors’ protection refers, it makes heavy emphasis in communication, disclosure and transparency. The supervision is also reinforced and put the focus in management and governance in financial entities and markets.

MiFID has a high complexity, but we wonder: what will it happen if we invest through a roboadvisor? Will these platforms avoid the regulation? No, in any case. Automation does not mean at all that roboadvisors will protect less their customers. On the contrary, roboadvisor promote lower costs, standardization and transparency.

We have to consider that there are several kinds of these platforms: form full automatic services to others where there is a platform with human active management. This diversity is not linked with different levels of protection, because all of them must comply with the suitable tests to check the investment ability and knowledge of the customers and they have also forbidden retrocession if they are independent. What does it mean? In short, independent roboadvisors will not be able to sell financial products from other entities (for instance, mutual funds) to obtain a sales commission. Well, let’s explain this a bit more: if you sign up in the roboadvisor XYZ, which reports as independent, it is engaged to sell the best products depending the investors’ profile: the best from any entity. If the roboadvisor is not independent, it has to be very clear that it sells from specific entities and receive a retrocession for any sale.

Roboadvisor are platforms, but there are people behind that create portfolios. These people must have specific studies, following the rule. But the most important effect is the transparency in costs: roboadvisors (as human advisors) will have to report with details about any costs. These costs will have to be listed, not accumulated. In this part, roboadvisors are far away from human advisors. One of the first thing that you find in roboadvisors websites are the amount that you have to pay for the management, because they have very clear their advantages against traditional models.

As you see, MiFID will regulate much more to protect investors. It was developed with several learning from the crisis and from the recent fintech solutions. It tries to order these new systems and they have to accept regulations. If roboadvisors wouldn’t accept MiFID, what credibility would they keep when they say that they are transparent?

We have a very long experience providing financial tools for investors. That’s why we publish regularly posts about our solutions, because we have always detected that users do not take advantage of many gadgets, features and details developed for them to a better management of their portfolios.

Do you know what kind of financial transactions you can do in T-Advisor? Let’s say that you have your portfolio and you add some assets: either stocks, ETF or mutual funds. The usual operations are “buy” and “sell”. Those are easy, but there are quite a lot of them. Think about that:

If you have funds, you maybe think to transfer from one to another. There are transactions of buy and sell, but transferring the money, not a payment or refund with cash.

What about stock dividends or bond coupons? If you receive those payments, you have to register that increase of capital.

In the case of bonds, they can be cancelled or they can expire, with the subsequent effects in your portfolio.

Again, what refers to shares or ETF, there can also be splits and sold of rights.

However, there are also movements linked to cash, because a portfolio has an associated account. Let’s only think about the different charges that you can register. We show you in this list:

Not bad, huh? T-Advisor has several functionalities that deserve to speak with more details. These are some of them. An investor need a tool that has the right features to register all kind of movements related to his or her assets. This is the way to improve your independent wealth management. This is a reason why we say that we make available professional tools for self-directed investors.

What stocks and funds were the best in April? T-Advisor publishes its ranking taking into account the score. T-Advisor patented score provides an asset rating (bullish, neutral or bearish) based on key performance indicators and technical analysis.

We have several times mentioned that T-Advisor has its own scoring for the assets. It is like the old marks that we got in the school, but this qualification is linked to our investments.

T-Advisor has a module that shows the best assets classified by the score. The question is: Should I include these assets in my portfolio? In fact, this is a good idea, but we do not have to forget two things:

Past performances do not guarantee future ones.

We have to be watchful of our investments, because markets change continuously.

If we look at our monthly top score (that we publish in this blog), we have always found interesting stocks and funds, because they usually have high performances. This fact is clearer in stocks than in funds (specially, in fixed-income funds).

However, it is interesting to see the evolution. It is not usual that top score assets repeat. Markets are naturally unstable, but instability does not mean something negative. It just means that there are continuous ups and downs and investors should regularly look into and watch their portfolios.

Our top score specifies the best performing assets with our best score in a specific moment. They give us clues about countries and sectors that are moving positively. Our score detects also these changes and includes them in the qualification. That is why our score is also live. It is not a mark that provides a position for a long term. On the contrary, it is always near the reality and sudden changes are also detected and included.

Top score assets provide guidelines about possible interesting movements, but investors do not have to move their strategies to certain assets guided by the moment. They have to look at the long term, instead of short-term impulses.

So, if you finally ask: then, what to do with the top score assets? In or out of my portfolio? The answer is: it depends. Check if they match your investment strategy and read the full T-Report. Then, take the decision and check regularly your portfolio and the changes in the scoring in the assets.

T-Advisor updates weekly a list of market opportunities from several stock exchanges around the world. We sum up a selection of the best ones:

EUROPE

Natixis (Paris). A French corporate and investment bank created in 2006 from the merger of the asset management and investment banking operations of Natexis Banque Populaire (Banque Populaire group) and IXIS (Groupe Caisse d’Epargne).

AMERICAS

BCE Inc (Toronto). A Canadian telecommunications company and one of country’s largest corporations.

ASIA-PACIFIC

APA Group (Australia). A company that owns and operates natural gas assets in Australia.

Find more opportunities from the main exchanges in the world on our module “Market opportunities” in T-Advisor.

It is maybe the asset that has deeply changed the asset management in the last 10 years. ETFs are the great trend in investments and it has continuously grown since its launch in the 1990s. We have already described what they are, their characteristics and advantages, but it is time now to wonder: how many types of ETF are there in the market?

The main group is the traditional index-based ETF, focused in tracking specific assets (bonds, market indexes or even equities that pay dividends), countries, sectors or even styles (mid-cap, large-cap). They are the majority and the broadly known.

However, there are other kinds of ETF that are also interesting in order to learn about the variety that this recent asset has reached:

Actively managed ETF: The first reaction is: am I reading right? Yes, you are. They are actively managed to meet a particular investment goal. It can sound contradictory and they are really a little group. They try to sum the advantages of both ETF and mutual funds, but the disadvantages are that fees are higher than traditional ETF and the transparency is a middle point between ETF (the highest) and mutual funds (the lowest).

Inverse ETF: These ones use derivatives to go just in the opposite direction of the market. The question that emerges is: what if the market wins? Am I going to lose? No. Inverse ETF are design to invest in short-term to hedge longer investments or take advantage of negative markets.

Leveraged ETF: They use derivatives to get higher returns that the reference index obtains. They try to multiply the daily earnings, but in this case, if the index loses, you will also multiply your negative performance.

Commodity and currency ETF: They are focused on specific physical assets, but also in the futures markets. Metals, agriculture, energy, currencies… It is a way to diversify investments in these assets.

Innovative ETF: Imagination has no limits and ETF also shows it. In the long list of innovations in this asset, there are ETF of ETF, Volatility ETF or Tax-Deferred ETF, just to name a few of them.

This list attempts to classify the different types of ETF, but there will be surely more in the near future. The volume of managed wealth and inflows to this assets reached continuous records and we are sure that this will not be the last time that we will write about them.